Monday, October 3, 2011

Deposits in Irish Banks

The level of deposits in the Irish banking system paints a pretty alarming picture.

Total Deposits

The collapse after the end of the initial “blanket” guarantee has been staggering with total deposits dropping from €894 billion in August 2010 to €579 billion in August 2011.  The lead story from Saturday’s Irish Times was that “Overseas deposits at Irish banks increase significantly”.  The article itself is correct but there is little justification for the headline as can be seen in the following graph.  This issue was pointed out by Prof. Karl Whelan over on

Total Deposits by Origin

It is also important to remember that this is all banks operating in Ireland.  From an Irish perspective the key portion of the Irish banking system is the six banks covered by the State guarantee (of which five have now been nationalised).  Deposits in these banks have fallen from €408 billion to €263 billion in the past year.  The did rise by €1.5 billion in August but that is hardly “significant”.

Total Deposits by Origin in Covered Banks

At best, it can be said that deposits in the covered banks have stabilised, and in particular for non-Irish resident deposits.  The trend for Irish resident deposits in the covered banks remains down.

A short presentation going through 17 slides showing different measures of deposits in the Irish banking system (including central bank deposits) is available below the fold.

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